Money Management

Are you considering a childfree lifestyle? While it’s not for everyone, it can be rewarding. Find out some of the financial benefits of not having kids. [[{“value”:”

As you go through everyday life, you’ll make crucial decisions that impact your life direction. One choice that many people must decide is whether to have kids. When considering your ideal life, you’ll want to determine if children are part of the picture.

It can be rewarding to become a parent. But you should know that your finances will be impacted, in addition to the everyday life changes you experience. Are you still on the fence about having kids? I’ll share a few ways not having kids could be a financial game changer.

1. You can focus on reaching career milestones

If you have lofty career goals, being childfree could make it easier to reach them. You’ll be responsible for other humans beyond yourself when you have kids. That means you may miss time at work to care for a sick kiddo or attend parent-teacher conferences. You may even have to step away from work for an extended period due to the high cost of child care.

But you won’t have these same struggles if you don’t have kids. You can put more energy and focus into reaching important career milestones. Because of your decision not to raise kids, you may be able to make more money throughout your lifetime. Having the ability to focus on your career growth can be a win for your bank account and resume.

2. You can prepare for retirement

Another financial win that can come with not having kids is the ability to save and invest for retirement. Many workers contribute to IRA accounts and other tax-advantaged retirement accounts. Investing is an excellent way to prepare for your future non-working years.

When you don’t have the responsibility of paying for the costs associated with raising kids, you’ll have more income to put toward your retirement planning goals. Some childfree adults may find they can retire from their careers sooner than expected or can afford to work part-time instead.

3. You can afford to prioritize self-care

Another potential financial benefit is that you’ll be able to afford self-care more easily. Whether you become a parent or not, taking good care of yourself, including your physical and mental health, is necessary. When you’re rested and cared for, you can be more present in your daily life.

Those who don’t have kids are more likely to afford the cost of self-care because they’re not spending money on child care and other family expenses. Whether self-care looks like bi-weekly therapy sessions, a fitness center pass, or monthly massages, spending money on self-care expenses like this can help reduce stress and improve overall health.

Keep your finances in mind

For some, having kids is a big life goal, and the benefits outweigh any financial struggles they may face. But don’t neglect to consider how your finances may change once you become a parent.

If you want to have kids and are willing to wait a few years, you can take steps to get your finances in order so you’re adequately prepared for the additional expenses of raising a family. For additional money help, take a look at our personal finance resources.

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Trying to save money on New York taxes? Learn how some New York state tax breaks are better than what the IRS allows. [[{“value”:”

New York is known for being a high-tax state because it charges state income tax. The top New York state tax bracket for 2023 is 10.9% — but you won’t have to pay that rate unless your income is over $25 million.

Empire State taxpayers still have some good options to reduce their state tax bill. Some New York tax breaks are even more generous than what the IRS allows at the federal level. Let’s look at a few of the biggest tax deductions for New York state taxpayers.

1. Traditional IRA deduction

Putting money into a traditional IRA is a great way to save for retirement and get a tax break on your federal taxes. And your IRA tax deduction will carry through to your New York state tax return. That’s because your New York tax return uses your federal adjusted gross income (AGI) as a starting point to calculate your state taxes.

So if you want to save money on New York state taxes, the first move you should make is to put money into a traditional IRA. But keep in mind that you also need to make sure you qualify for tax deductible IRA contributions based on your income and whether you or your spouse are covered by a retirement plan at work.

2. Health savings account (HSA) contributions

A health savings account (HSA) is one of the best tax-advantaged accounts you can get. These accounts let you save for healthcare costs (or future retirement expenses) with pre-tax money. You get a federal tax deduction for the money you put into an HSA, just like with a traditional IRA.

Keep in mind that you don’t get a separate New York tax deduction for HSA contributions. Instead, the HSA tax break is reflected in your federal adjusted gross income (AGI), which you then use to calculate your New York taxable income.

3. 529 education savings plan deduction

If you’re saving for a loved one’s future college or other qualified education expenses, New York will give you a state tax deduction for your 529 plan. The New York 529 Direct Plan lets you deduct up to $5,000 of 529 plan contributions per year from your New York state taxable income — or up to $10,000 for married couples filing jointly.

4. Standard deduction

The New York standard deduction might be one of the biggest numbers you can subtract from your New York taxable income. Unfortunately, the New York standard deduction is much lower than the federal version.

The 2023 federal standard deduction for married couples filing jointly is $27,700, but the New York standard deduction for these couples is only $16,050. A married couple could have New York state taxable income that is $11,650 higher than their federal taxable income — unless they have enough other deductions to itemize on their New York state taxes.

5. New York itemized deductions

Even though the New York standard deduction is lower than the federal version, New York makes it easier to itemize. New Yorkers are allowed to take itemized deductions on state taxes even if they do not itemize on federal tax returns. This can be a big advantage!

Here are some common itemized deductions that New Yorkers can take — and some of them are more generous than federal itemized deductions.

State and local taxes — no $10,000 limit

Many federal taxpayers from high-tax states like New York are no longer able to itemize deductions on their federal returns because of the $10,000 SALT deduction cap that took effect in 2018.

On federal taxes, people are only allowed to deduct up to $10,000 per household of state and local taxes — such as state income taxes and local property taxes. The $10,000 SALT deduction cap caused a big tax hit for many homeowners in states like New York because they no longer get a federal tax break for their real estate taxes and state income taxes.

Good news: New York doesn’t have this $10,000 limit for state and local taxes on your state itemized deductions. Even if you took a hit from the SALT deduction cap on your federal taxes in the past few years, you can write off a much bigger amount on your New York tax return.

Home mortgage interest

You can deduct home mortgage interest and interest on home equity loans from your New York taxable income, based on the federal tax rules for tax year 2017 (before the passage of the Tax Cuts and Jobs Act).

Job expenses and miscellaneous deductions

If you pay for certain costs and expenses that are part of your job as an employee, like travel, gifts, and car expenses, New York state will let you claim these as itemized deductions. (The IRS no longer allows these deductions for federal taxes.)

Medical and dental expenses

This is one area where New York state’s itemized deductions are less generous than the Feds. For your New York tax return, you can only deduct the amount of qualifying medical and dental expenses that is larger than 10% of your federal adjusted gross income (AGI). (The Feds let you deduct the portion above 7.5% of AGI.)

Gifts to charity

New York rules for itemized deductions of charitable contributions are the same as for your federal tax return. Give generously and get a tax break!

Bottom line

New York state income taxes can be complicated, but you might be surprised at how many state-level tax breaks are available for New York taxpayers. The best tax software can help New Yorkers get every tax break that they deserve — federal and state.

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Should you be spending more to feed your pet? Discover the latest in premium pet food trends and save on costs with pet insurance. [[{“value”:”

Once upon a time, pet food was a simple affair — a can of mystery meat or a bag of dry kibble was the standard fare for our furry friends. But oh, how the times have changed! Now, walking down the pet food aisle feels akin to browsing a high-end health food store, but for animals.

From organic to grain-free, the choices are endless, and the prices…well, they can make your wallet whimper. The typical dog owner spends around $1,130 annually on their furry friend’s meals. However, for those embracing vegan diets for their pets, be prepared: expenses can soar up to $4,274!

But fear not, pet parents! Here, we guide you through the maze of modern, expensive pet food trends and what you should know.

Custom meal plans are becoming the norm

The first trend that’s making waves in the world of pet food is the rise of customized meal plans. Just like humans, every pet is unique, with their own likes, dislikes, and nutritional needs. Enter the era of personalized pet food, where meals are tailored to your pet’s specific requirements. This could mean food formulated for a senior dog with arthritis or a protein-packed diet for your energetic puppy. The benefits are clear — better health and, potentially, fewer trips to the vet. But as you might guess, this bespoke approach comes with a bespoke price tag.

Pet owners are shopping organic for themselves and their furry friends

Organic pet food is another trend that’s been gaining traction. This trend mirrors the human shift toward cleaner, more sustainable eating habits. Organic pet foods promise ingredients that are free from pesticides, synthetic fertilizers, and genetically modified organisms (GMOs). For the eco-conscious pet owner who scrutinizes labels for their own food, this trend is a natural extension of their values. However, the peace of mind that comes from feeding your pet a chemical-free diet also comes with a higher cost. The average dog owner will spend about $1,446 a year on organic pet food.

Grain-free is in demand

Grain-free pet foods have become incredibly popular, spurred by concerns over allergies and digestive issues. In fact, it’s the third most popular diet among dog owners. The idea is that some pets may be sensitive to grains, and by eliminating them from the diet, you can alleviate these problems. While the science on the universal benefits of grain-free diets is still out, many pet owners swear by them. Whether it’s a true need or a preference, grain-free options are plentiful but often come with a premium price. On average, it will set a dog owner back $1,078 a year for grain-free pet food.

Raw pet food has pros and cons

The raw food diet for pets is exactly what it sounds like — feeding your pet raw meat, bones, organs, and some raw fruits and vegetables. Proponents argue it’s closer to what animals eat in the wild and can lead to shinier coats, healthier skin, and improved dental health. However, this trend is not without its controversies and costs. There are concerns about the risk of bacterial contamination, and the price of raw, high-quality meat is certainly higher than traditional pet food costing a dog owner about $1,727 annually.

Pet supplements are on the rise

As pet parents seek to optimize their furry friends’ health, supplements have surged in popularity. From probiotics to fish oils, supplements are used to address various health issues and enhance overall well-being. While they’re an add-on rather than a core diet component, they contribute to the rising cost of pet care, emphasizing the lengths to which owners will go to ensure their pets are happy and healthy.

Pet insurance can help cover costs

With the rising pet care costs, from food to vet bills, many owners are turning to pet insurance as a safety net. Pet insurance can help manage the costs of unexpected veterinary care, but it’s also worth considering for owners investing in premium pet foods and supplements. After all, the goal is to prevent health issues that can lead to expensive treatments down the line.

If your veterinarian recommends a high-end diet, it’s worth checking your pet insurance policy to see whether it might be covered. The leading pet insurance providers may offer coverage that significantly reduces the financial burden. If your policy pays for even 70% of the expenses, you could stand to save hundreds of dollars each year.

The world of pet food has evolved dramatically, with trends focusing on customization, quality, and health. While the costs may be higher, the potential benefits for your pet’s well-being are significant. As we navigate this landscape, it’s clear that our pets are becoming more like family members, with diets to match. And as any pet parent knows, nothing is too good for our furry family.

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Balance transfer cards can help you manage your credit card debt, but you should be cautious about how you use them. Read on to find out why. [[{“value”:”

The average credit card interest rate is about 20%, and these high rates make it increasingly difficult for Americans to pay off their credit card debt. It’s no wonder why late credit card payment numbers are inching higher.

Transferring some or all of your credit card debt to a balance transfer card can be a great way to get on top of payments because of their low interest rates. Many balance transfer cards offer 0% APR for 12 months or longer, and you can often transfer thousands of dollars to the new card.

However, opening a new credit card account when you’re already in debt can be risky. Here are some common mistakes people make with a balance transfer card and how to avoid them.

1. Making late payments

Late payments should always be avoided because they hurt your credit score. Payment history accounts for 35% of your FICO® Score, and late payments can stay on your credit report for up to seven years.

However, a late payment on a balance transfer card is even worse because you could lose your low introductory percentage rate. This means you might have to pay interest on the amount you transferred and any new purchases you make with the card.

It’s essential to set up automatic payments on the balance transfer card so you don’t miss payments and potentially worsen your finances.

2. Adding to your credit card debt

A balance transfer card can help you catch your breath on your credit card payments by temporarily lowering the interest rate so your debt doesn’t continue to grow.

But it can be tempting for some people to use the balance transfer card for everyday expenses because it has a low or 0% interest rate. Doing this will only add to your debt obligations and make it even harder to pay off the balance once the introductory interest rate expires.

You can avoid this dilemma by not using your balance transfer card to pay for any new purchases. Once you’ve transferred your balance to it, stick the card in a drawer and keep it there. Then, set up automatic payments to begin paying down the balance.

3. Overlooking the balance transfer fee

Balance transfer cards typically charge a fee — usually between 3% and 5% of your total balance — to transfer your balance to the new card.

This means if you transferred $5,000 to a new balance transfer card with a 3% transfer fee, you would pay a $150 fee, and your new balance would be $5,150. It’s worth mentioning that some cards may increase your transfer fee to 5% after an initial 3% transfer fee after a few months.

If the card offers a 0% intro APR, paying the balance transfer is likely worth the cost. But it’s still important to know what the fee could increase to if you make additional transfers later.

4. Not paying off the balance during the introductory period

Not everyone’s debt situation is the same, but if you’re transferring some of your credit card debt to a 0% APR card, your goal should be to pay that balance off before the high APR kicks in.

Many transfer credit cards offer a low introductory rate for 12 months to 21 months. Let’s assume you transferred $5,000, paid a 5% fee, and didn’t pay off that amount during your introductory period, so you now have $5,250 on the card at the end of your promotional period.

Assuming you have to pay the current credit card average APR of about 20%, this means at the end of your introductory period, you’ll start spending nearly $87 in monthly interest (of course, this will vary depending on your monthly balance). This means you could be in a potentially worse financial position than you were before.

5. Continuing to use your old card

There isn’t much point in transferring your old credit card balance to a new card if you continue using the old card and adding to your overall debt.

I recently paid off some credit card debt, and one of the first steps I took was to stop using my credit card. Doing so helped me have a fixed total that I could see getting lower as I made payments against the debt.

If you sign up for a balance transfer card, it’s a good idea to completely stop using your old card and rely on cash or a debit card. If not, you could quickly rack up more debt on your old card.

The best way to use balance transfer cards

Balance transfer cards can be useful tools for lowering your interest rate and allowing you to chip away at debt without having interest accumulate every month.

But you need a plan in place to make it happen. Consider using a credit card payoff calculator to determine how long it will take you to pay off your balance. If it will take longer than your intro APR period, calculate how much interest you’ll pay when the higher APR kicks in.

Doing the math upfront will help you create a clear payoff plan and better understand whether a balance transfer card is right for you.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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Using your tax refund to pay off debt? Read on for a game plan to follow. [[{“value”:”

For some people, filing taxes this season isn’t all bad. Many filers have submitted their returns only to learn that they’ve got a refund coming their way.

If you’re anticipating a tax refund, you may be tempted to spend that money on something fun, or on something you’ve been trying to save for over many months, like new furniture. But instead, it’s a smart idea to use those funds to better your financial situation.

In fact, a good 36% of filers with a tax refund plan to pay off debt with that money, according to data from Assurance. And if you’d like to tackle a similar goal, here’s a good way to go about it.

Consider a balance transfer

If your tax refund will be large enough to cover all of your outstanding debts in full, then you can simply take that money and use it to tackle each debt one at a time in short order. But if your tax refund will help you eliminate a big chunk of your debt, just not all of it, then you may want to consider transferring your various credit card balances onto a single card with a 0% introductory APR.

Let’s say you’re getting $3,000 back from the IRS this season and you owe $4,000 on your credit cards. If you’re able to pay off all but $1,000 of that balance, it’s conceivable you may be able to knock out the remainder in a year or slightly more. Meanwhile, many balance transfer offers give you 12 to 15 months (sometimes more) of 0% interest, so there’s a prime opportunity to enjoy a reprieve from interest and rid yourself of debt for good.

Look at a personal loan if you’ll still be left with a large balance post-refund

A balance transfer could be a smart move when your tax refund will help knock out most of the debt you owe. But if your refund will only work to eliminate a portion of it, then a personal loan could be a better bet than a balance transfer.

A personal loan won’t give you a period of 0% interest. Instead, it will give you a fixed interest rate on your debt so your monthly payments are predictable. And the interest rate a personal loan charges is likely to be considerably lower than the interest rate a credit card charges you.

So let’s say you’re getting a $3,000 tax refund this season but you’re in debt to the tune of $7,500. That $4,500 remaining may not be something you can pay off during a credit card introductory period, so a personal loan may be more optimal in that scenario.

It’s encouraging to see that so many Americans are planning to use their tax refunds to pay off debt. If you owe money in some shape or form, consider doing the same. The sooner you tackle your debt, the less money it’s apt to cost you.

That said, the one time it doesn’t pay to use your tax refund to tackle debt is when you have no emergency savings. In that case, your refund should go into the bank. Otherwise, you might risk landing in debt the next time an unplanned bill pops up.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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